20VC Meta CMO Alex Schultz on The Crucible Moments Scaling Facebook to 1BN Users, Turning Facebook Reels Into a Monetisation Engine, Competing Against TikTok and SNAP, Coming Out in the World of Tech; The Challenges and What Needs to Change

In this episode of 20 VC, host Harry Stebbings interviews Alex Schulz, the CMO and VP of Analytics at Meta. Schulz discusses the evolution of Meta's products and the importance of setting goals that lead to a winning path, emphasizing the need for metrics that accurately reflect those goals. He candidly shares his journey as a gay man in tech, the challenges of being out in the workplace, and the progress still needed for LGBTQ+ acceptance. Schulz also touches on Meta's rebranding from Facebook, aiming to clear consumer confusion and broaden the brand's innovative potential beyond social media to include virtual connectivity. Additionally, he highlights the critical role of analytics in learning from data, the balance between speed and patience in execution, and the necessity of being direct and honest in management. Special thanks are given to Shaq and Julianne Cordonur for facilitating the interview, and Secureframe, Deel, and Retool are featured for their contributions to security, team management, and internal tool development.

• Setting a goal is essential for establishing a winning trajectory.
• Reels is intended to become not only an engagement tool but also a significant monetization platform.
• The initial version of Reels was not successful, particularly when integrated into the stories feature.
• The importance of analytics and patient leadership is emphasized.

"You need to set a goal that puts you on a winning path at the absolute base level. We want to turn reels into a really major monetization engine, not just an engagement engine."

This quote highlights the importance of goal setting in product development, specifically with the intention of turning Reels into a major source of revenue, beyond its role in user engagement.

• Harry Stebbings introduces Alex Schulz, a respected leader in technology, who is rarely interviewed.
• Mark Zuckerberg credited Alex Schulz as vital to Facebook reaching a billion users.
• Alex Schulz's roles include CMO and VP of Analytics at Meta, where he has been influential in product integration and marketing.
• Schulz is also an advocate for the LGBTQ+ community within Meta.
• Secureframe is introduced as a compliance automation platform that simplifies security and privacy compliance.
• Deel is presented as an HR platform that manages global teams and ensures compliance.

"Alex Schulz, CMO and VP of analytics for meta, formerly Facebook leading marketing, analytics and internationalization."

This quote introduces Alex Schulz's role at Meta and his significant contributions to the company's marketing, analytics, and internationalization efforts.

• Alex Schulz began his journey in the digital space with a paper airplane website.
• He learned SEO and monetization strategies, including affiliate marketing with eBay.
• The success of his website in monetization led to a job offer from eBay, which he accepted after completing his education.
• Schulz emphasizes the importance of data-driven decisions and the impact they had on his early career.

"I started to learn how to make money online."

This quote reflects Schulz's transition from being interested in website traffic to focusing on monetization strategies, which played a crucial role in his professional development.

• At eBay, Schulz learned about data-driven marketing, affiliate marketing, on-site merchandising, and CRM strategies.
• He explains a strategic shift at eBay from focusing on confirmed registered users to activated confirmed registered users, which improved long-term retention.
• The change in focus led to a different approach in online marketing and keyword prioritization, emphasizing user actions that increased retention.

"So what it changed was instead of just having the keyword list prioritized by how many registrations you'd get, you would look at the keyword list prioritized by how many bids you got."

This quote details the strategic shift at eBay from prioritizing user registrations to focusing on actions that lead to higher retention, such as bids or purchases.

• Schulz joined Meta after his tenure at eBay.
• He acknowledges the contributions of many individuals at Meta, including Javi, Naomi, Brian Hale, and Dustin Moskovitz.
• Schulz highlights the importance of a data-inspired growth model and the insights gained from growth accounting.
• The realization that churn and resurrection were significant factors led to a shift from acquisition to retention.

"Growth accounting. Number of registrations plus number of resurrections minus the number of people who churn equals your net growth."

This quote explains the growth accounting formula that was pivotal in shifting Meta's focus from acquisition to retention, significantly impacting their growth strategy.

• Schulz discusses how focusing on retention rather than acquisition changes product and marketing strategies.
• He uses eBay's shift to activated confirmed registered users as an example of how prioritizing retention can transform business operations.
• The focus on retention leads to different landing page strategies and keyword portfolios.

"If you sign up for eBay and you do an action, bid, buy or list, your long term retention goes up tremendously."

The quote exemplifies the link between user actions and retention, reinforcing the idea that immediate engagement with the platform's core functionalities can significantly improve long-term user retention.

• Identifying actions that lead to retention is a matter of simple correlation with the desired outcome.
• For various platforms, the critical actions differ: friending on Facebook, messaging on WhatsApp, following on Instagram, and bidding or buying on eBay.
• Common sense should be applied in addition to data when determining these actions.

"It is a simple correlation. There's no clever math to it."

This quote simplifies the process of determining which user actions lead to retention, emphasizing that it is based on straightforward correlation rather than complex mathematics.

• Schulz discusses the ongoing relevance of friending and following in the age of content discovery platforms like TikTok and Instagram.
• While content discovery is increasingly important, the social graph remains a valuable source of data for personalized content recommendations.
• Schulz acknowledges the need for balance and not treating the social graph as the sole driver of retention.

"It's who they follow and who they friend and what they like."

This quote underscores the continued importance of social connections in influencing content discovery and user retention on social media platforms.

• Schulz criticizes the binary nature of public opinion, suggesting that nuanced perspectives are often overlooked.
• This applies broadly, including discussions within the technology industry and societal issues.

"Yes, in all ways. I say this as a gay man. Everyone's too binary."

Schulz's quote points out the oversimplification in public discourse, advocating for a more nuanced approach to various topics, including those related to identity and technology.

• The decision to split Facebook Messenger from the main Facebook app was a significant strategic move.
• The split was a response to the shift to mobile and the need to focus on messaging as a core function.
• The change was driven by the recognition that active engagement through messaging increased user retention.

"Fundamentally, in the shift to mobile, we'd actually done very well with messaging on the web."

This quote explains the rationale behind the Facebook Messenger split, highlighting the company's adaptation to the mobile landscape and the importance of messaging in retaining users.

• Alex Schulz discusses the initial missteps in measuring growth, leading to a loss of market share.
• The decline of web messaging was faster than the growth of mobile messaging for the company.
• Competitors like WhatsApp and iMessage were gaining traction, signifying a platform shift.
• User research revealed that the messenger app was preferred due to the expectation of instant responses.
• The company's messaging product was being used more like Direct Messages (DMs) than a true messaging app.
• They decided to focus on developing a true messaging app, indicated by a blue dot for online presence.
• Experiments by country showed an initial dip in usage followed by a significant increase.

"We were actually losing market share because the web was declining faster than mobile was growing for us." This quote highlights the realization that despite growth in mobile messaging, the overall market share was declining due to the rapid decline of web messaging.

"It was them using the messenger app. And we investigated with user research why, and it was because they knew that when people had the messenger app, they would respond instantly to their messages." This quote explains the findings from user research that showed the importance of instant response expectations in messaging app usage.

• The company conducted experiments to test the necessity of a dedicated messaging app.
• Initial countries tested were Portugal and Romania, followed by Hungary, Czech Republic, and others.
• Testing in different countries helped understand the impact of the app in various markets.
• Despite an initial dip in usage, the experiments showed a rebound and significant usage increase.
• Global rollout was based on the positive results from these experiments.

"We ran experiments. We did it by country." This quote indicates the methodical approach taken to test the new strategy by experimenting in different countries.

"Initially, there was a dip in usage, and then we saw a rebound and a tremendous increase because people had the expectation they'd get an instant response." This quote summarizes the pattern observed during the experiments, emphasizing the importance of meeting user expectations for instant responses.

• Alex Schulz discusses the balance between speed and precision in decision-making at different stages of a company.
• For startups, quicker bets are necessary due to lack of extensive data.
• Mature companies can take longer-term experiments but must also make big bets like reels or virtual reality.
• Being fast is crucial in tech, as missing waves can significantly impact a company's success.
• Schulz admits they moved too slowly with Messenger and should have trusted the data sooner.

"You need to segment and you shouldn't run experiments. It depends on your scale." This quote emphasizes the need for segmentation and tailored experiments based on the scale of the company.

"It matters. Chat took markets, line took markets." This quote highlights the importance of speed in the tech industry, referencing competitors who gained market share quickly.

• Discussion around being second in the market and the benefits of learning from the first mover.
• Schulz believes it's okay to be second if you can catch up and overtake with innovation.
• The first version of reels failed, but subsequent iterations led to successful innovation.
• The pace of learning and iteration is critical to stay competitive.

"Catching up on the basics and then trying to out innovate, like step, like launch, catch up, overtake with innovation, I think is a very good model." This quote explains Schulz's philosophy on being second in the market and using innovation to overtake competitors.

"The first version of reels failed. We tried to put it in the stories spot. We tried to integrate it that way. It hard failed." This quote provides an example of learning from failure and the importance of iteration in product development.

• The role of analytics leaders is to provide clear explanations of data without overwhelming with caveats.
• Schulz stresses the importance of being direct and honest with data insights to influence decision-making.
• Building a learning function within a company requires analytics that accurately predict outcomes and are trusted by product leaders.

"The most important job I have is data science, data engineering, the analytics role." This quote underscores the significance of analytics in guiding company decisions and strategy.

"You need analytics leaders who can explain what's happened, who take out enough caveats, they are correct in what they say, they are not lying." This quote emphasizes the need for analytics leaders to communicate effectively and honestly to influence actions based on data.

• The transition from direct sales to self-serve advertising was significant for the company.
• They introduced a feature that allowed businesses to easily boost posts as sponsored stories.
• A mistranslation in the French version led to a significant increase in advertiser growth, teaching the importance of clear messaging.
• The company uses a blend of self-serve and direct sales, with sales teams reaching out to promising leads from self-serve.
• The self-serve model, combined with direct sales, has been effective in scaling advertising for small and medium businesses.

"We actually have a lovely blend. It isn't like direct sales to self serve." This quote highlights the integrated approach of combining direct sales and self-serve advertising to cater to businesses of different sizes.

"We changed everyone on the site. Instead of saying advertise, we changed it to create an ad, and we step changed up advertiser growth." This quote illustrates the impact of simple changes in wording on user behavior and business growth.

• Creating a culture where experimentation is encouraged and mistakes are acceptable is key.
• Meta has a culture where honest mistakes are tolerated, and learning from them is emphasized.
• The company conducts blame-free postmortems to understand errors and improve.
• Schulz advises being direct and honest in difficult conversations, even when uncomfortable.

"We try not to enforce blame. Look, if you do the same thing five times, you muck up the same five ways, you will have a performance conversation with your manager." This quote explains the company's approach to mistakes and learning, balancing tolerance with accountability.

"I truly, deeply believe the kindest thing you can do is be direct and honest with somebody." This quote captures Schulz's personal philosophy on the importance of directness and honesty in professional communication.

• Delivering feedback is crucial for both managers and their team members.
• Managers should provide continuous guidance to avoid surprises in performance reviews.
• It's important to empathize with the person receiving feedback, especially if they are struggling despite their efforts.
• Management involves caring for your people and providing honest feedback, which is a form of caring.
• The most caring people in one's life often give the toughest feedback.
• Managers should put themselves in the shoes of their employees when delivering feedback.
• Feedback should be aimed at helping the individual improve or to clarify when things are not working out.
• Surprises in performance reviews usually indicate a failure on the manager's part.
• Managers won't always get feedback delivery right, and reactions can vary from person to person.

"And if you put yourself in the other person's shoes and know where they're standing and you're like, look, this is feedback to make you better. Or, hey, this is not working out. And they think, well, it's not working out. And again, if it's a surprise, you have mucked up as a manager and that's your fault."

This quote emphasizes the importance of empathy in management and the responsibility of managers to provide clear and timely feedback to prevent surprises during performance evaluations.

• The rebrand was initiated to reduce confusion between Facebook the company and Facebook the app.
• Consumers were confused when they saw Facebook mentioned in other apps like WhatsApp.
• The rebrand aimed to allow innovative work within the company to be associated with the corporate brand rather than just the Facebook app.
• The name change was intended to broaden the perception of the company to include all its products and innovations.
• The rebrand helped distinguish the corporate entity from individual apps, benefiting media, politicians, investors, and consumers.

"So distinguishing what the corporate entity was from the app, I think, was the kindest thing for media, politicians, investors, but also just the consumers of the app."

This quote explains the rationale behind the rebranding effort, highlighting the need to differentiate the corporate entity from the app for clarity among various stakeholders.

• The company's structure allows for sharing and learning across different divisions.
• Regular meetings and forums are held for leaders across the company to share insights and analytics.
• Processes are in place to ensure data and learnings flow between different parts of the company.
• Individual leaders are responsible for ensuring that innovations like Reels are shared across the company.
• The company's name does not impede the culture of learning and sharing that has been established.

"We have processes to make sure data's flowing between silos. And honestly, it doesn't matter what the company's called as to whether that's. You can build a culture that does learn and share or a culture that doesn't. And we are one that does learn and does share."

This quote highlights that the company's culture, rather than its name, is what facilitates learning and collaboration across different divisions and teams.

• "Meta" reflects the company's future vision and its focus on connecting people in innovative ways.
• The company's products represent different aspects of connection, from intimate conversations on WhatsApp to social discovery on Facebook.
• The metaverse is seen as an endpoint for virtual connection, but the journey begins with existing 2D interfaces.
• The rebranding to Meta is part of a broader narrative that the company needs to communicate to the public.

"Our brands in our branded house are meta. We connect people in awesome and inspiring ways."

This quote explains the choice of "Meta" for the rebranding, emphasizing the company's commitment to connecting people through various platforms and ultimately in the metaverse.

• The rebrand has been perceived positively, as indicated by rankings in a Price Waterhouse report.
• The rebrand aimed to highlight the company's potential for future innovations.
• The company differentiates between metrics and goals, with metrics being imperfect representations of goals.
• Independent verification, like the PwC study, suggests that the rebrand has been successful in achieving its goals.

"We wanted people to know, as the second point I made, there are all these different things that we do as a company that are exciting and there for the future and people are knowing it."

This quote suggests that the rebrand to Meta has successfully communicated the diverse and forward-looking nature of the company's work to the public.

• Every metric has flaws and cannot perfectly describe a goal.
• The evolution of metrics from registered users to monthly active users shows the need for precision.
• Founders should be precise in their thinking and understand the limitations of metrics.
• Goodhart's Law states that when a measure becomes a target, it ceases to be a good measure.
• Founders should be aware of the pitfalls of setting the wrong metrics for their company.

"There's no metric proper. Lee describes a goal."

This quote underlines the inherent imperfection of metrics in capturing the full scope of a goal, highlighting the need for critical thinking in setting and evaluating company metrics.

• Goals and metrics should be changed infrequently, based on new information or insights.
• It's important to set goals that put the company on a winning path and to recognize when goals are not aligned with desired outcomes.
• Goals should be ambitious but realistic, and teams should be motivated to strive for them even if they are not always achieved.

"You should aspire to not change them very often."

This quote suggests that stability in goals and metrics is valuable, and frequent changes can be disruptive to a company's focus and direction.

• Setting the right goals is crucial to prevent teams from feeling dejected when they are not met.
• Goals should be challenging but attainable, and failure to meet them should be a cause for reflection, not demoralization.
• It's important to ensure that goals lead to a winning path and that metrics accurately reflect the company's objectives.

"The saddest thing is when a team fails, having hit all its goals on the way down."

This quote points out the danger of setting goals that do not lead to success, emphasizing the need for goals that are aligned with a positive trajectory for the team and company.

• No metric or set of countermetrics is perfect in business analytics.
• Leaders must apply logic and common sense on top of data to identify potential gaming of the system.
• Common sense is often referred to as the least common of all senses but is crucial in decision-making.

"This is where it comes back to again, my boss is saying common sense is the least common of all senses."

This quote emphasizes the rarity and value of common sense in business, highlighting its importance in evaluating metrics and making decisions.

• Alex Schulz came out twice, once at university and again in the professional environment.
• The process of coming out was emotionally challenging, especially when it impacted personal relationships and career prospects.
• Initially, Alex faced difficulties being openly gay at work, particularly during his time at eBay.

"So I came out twice. So I came out of university because I had a boyfriend, and I suddenly realized that being gay wasn't about sexual attraction. You could actually be in love with someone, and it sort of changed everything."

This quote describes the personal realization that led to Alex's first coming out, emphasizing the emotional aspect of the experience.

• Alex describes the psychological impact of being closeted at eBay and the fear of career repercussions.
• Moving to Facebook, he found a supportive community that encouraged him to be open about his sexuality.
• The support from influential colleagues at Facebook, such as Blake Ross and Mark Slee, was pivotal in his decision to come out at work.

"I suddenly felt I could be out. And that was what tipped me over to being out of the office."

Alex shares the moment he felt comfortable being openly gay at work, highlighting the importance of support from colleagues.

• Alex acknowledges the challenges faced by the LGBTQ community, especially the trans community, in feeling comfortable to come out at work.
• He reflects on the scarcity of openly gay individuals in leadership positions and on tech stages, indicating there is still progress to be made.
• Alex encourages LGBTQ individuals to seek environments where they can be open about their identity.

"There's still a gap, and we have a long way to go."

This quote acknowledges the ongoing struggle for LGBTQ inclusivity and the need for continued efforts to bridge the gap.

• Alex discusses the initial challenges and eventual strong support from his parents after coming out.
• He credits his parents for instilling values such as being "long term kind" and doing the right thing, which have influenced his professional approach.
• Alex's parents' support has been a significant factor in his success.

"They've been just incredible. And, yes, there was an initial bump because it was surprise because I don't present very gay."

This quote illustrates the initial surprise and subsequent support from Alex's parents regarding his coming out, emphasizing the importance of family acceptance.

• Alex values being "long term kind," a trait he attributes to his parents' influence.
• He also discusses the importance of being "patiently right" and the skill of actively listening, which he learned from his father.

"I think long term kind, doing the right thing, if you believe it's the right thing, even if people are annoyed at you or it's really hard to do it, that is something I've learned from both of my parents."

This quote captures the core values passed down from Alex's parents, which have shaped his character and approach to life and work.

• Alex believes in the importance of speed of execution in startups, but also being patient about being right.
• Loyalty is the one word Alex would choose for his tombstone, emphasizing its importance to him.
• Alex reveals that Facebook's growth team was created in response to a growth halt in 2007.
• He has changed his belief that user acquisition is the hardest part of growth, citing TikTok as a counterexample.
• Alex has had mentors who taught him to adjust his tone and ensure he is heard, not just listened to.
• The growth team at Facebook does not ring the gong after shipping because they celebrate success, not just the act of shipping.
• Alex prides himself on retaining team members for a long time, attributing it to caring about their development and providing honest feedback.
• Looking ahead, Alex aims to turn reels into a major monetization engine, establish the metaverse's success, and address public concerns around social media.

"I think that we want to turn reels into a really major monetization engine, not just an engagement engine."

This quote outlines one of Alex's future goals for his work, indicating a strategic focus on monetization.

• Secureframe is an all-in-one platform for automated security and privacy compliance.
• Deal is a platform for managing global teams, handling HR, and ensuring compliance.
• Retool is a tool for building custom internal software quickly and efficiently.

"Automate your security and privacy compliance with Secureframe schedule a demo today@secureframe.com."

This quote is a promotional mention of Secureframe, highlighting its purpose and inviting listeners to schedule a demo.